What was the long-term portion of Benihana's finance lease liabilities as of December 31, 2022?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
| December 31, | December 31, | |||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Finance lease right-of-use assets (1) | $ | 850 | $ | 942 |
| Current portion of finance lease liabilities (1) | 222 | 177 | ||
| Long-term portion of finance lease liabilities (1) | 658 | 754 |
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the long-term portion of their finance lease liabilities as of December 31, 2022, was $754. This figure reflects the company's obligations for leased assets that extend beyond the upcoming year. These liabilities are associated with the right to use certain assets under finance lease agreements.
For a prospective franchisee, understanding these liabilities is crucial as it provides insight into Benihana's financial commitments and how they manage their assets. Finance leases are typically used for long-term assets, and the liabilities represent the present value of future lease payments. This information is usually found within the 'other long-term liabilities' section of the consolidated balance sheets.
The FDD also notes that the company has entered into operating leases for future restaurants in Denver, Colorado, and Phoenix, Arizona, with a present value of $2.9 million as of December 31, 2022. These leases, with initial terms of 10 to 15 years, are expected to commence within the next twelve months. This indicates Benihana's ongoing investment in expanding its restaurant locations and the associated lease obligations that franchisees should be aware of.
It is important for potential franchisees to review the complete financial statements and related notes in the FDD to fully understand the nature and extent of Benihana's lease obligations and how they might impact the company's financial performance and stability. Consulting with a financial advisor is recommended to assess the implications of these liabilities on the overall franchise investment.